Latest figures show tree clearance at its lowest since 1988, officials say.

After several hours of debate, Brazilian senators voted by 59 to seven to approve the legislation.

It now goes back to the Chamber of Deputies, which in May voted to overhaul the Forest Code.

Further amendments are expected before going to President Dilma Rousseff to sign into law.

The bill poses a political dilemma for President Rousseff, correspondents say, as she aims to both support economic development but also uphold environmental pledges made during her election campaign.

Environmental fears

Brazil is a major food producer and the farmers' lobby argues environmental protection unnecessarily harms their sector.

"This is the first time we're ending the monopoly, that we're ending the environmental dictatorship where half a dozen [non-governmental organisations] controlled the environment ministry," said Sen Katia Abreu, president of Brazil's National Agriculture and Livestock Association (CNA).

In a statement, the CNA said that new legislation would allow Brazil to "respond to the world's growing demand for food, as it continues to be a leading example in the preservation of its forests and biodiversity".